Explain briefly the purposes for which long term finance is required b

1.	Explain briefly the purposes for which long term finance is required by business concerns?
Answer» As the name suggests,Long term financingis a form of financing that is provided for a period of more than a year. Long term financing services are provided to those business entities that face a shortage of capital.There are various long term sources offinance. Exampleof long-term financing include – a 30-yearmortgageor a 10-year Treasury note.Equityis another form of long-term financing, such as when a company issuesstockto raisecapitalfor a new project. Purpose of long term finance: To finance fixed assets. To finance the permanent part ofworking capital. Expansion of companies. Increasing facilities. Construction projects on a big scale. Provide capital for funding the operations. This helps in adjusting thecash flow.

Explain briefly the purposes for which long term finance is required by business concerns?

Answer»

As the name suggests,Long term financingis a form of financing that is provided for a period of more than a year. Long term financing services are provided to those business entities that face a shortage of capital.There are various long term sources offinance.

Exampleof long-term financing include – a 30-yearmortgageor a 10-year Treasury note.Equityis another form of long-term financing, such as when a company issuesstockto raisecapitalfor a new project.

Purpose of long term finance:

To finance fixed assets.

To finance the permanent part ofworking capital.

Expansion of companies.

Increasing facilities.

Construction projects on a big scale.

Provide capital for funding the operations. This helps in adjusting thecash flow.

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